French markets are down 32 percent for the year. German markets are down 28 percent. British stocks have shed 25 percent of their value. Those numbers from Monday's close compare with a 28 percent loss for America's benchmark Standard & Poor's 500 index.

People in Munich and Marseilles are fleeing to the same havens  bonds, money-market accounts, even perhaps mattresses  that US investors have sought in recent weeks.

The simultaneous declines highlight the degree to which today's industrial economies are synchronized. In fact, the worldwide drop in equity prices is to a considerable extent a follow-the-leader, panic phenomenon. US markets are down; foreign markets follow.

This has some logic. The US economy has long been the engine for world economic growth  and US markets have often set the tone for global ones.

"As the US economy appears to falter, then foreign markets suffer as badly or more so," says David Malpass, an international economist.

While world markets generally moved up Tuesday, the pervasive trend has been downbeat.

Essentially, experts say, European markets developed price "bubbles" similar to America's. As share prices deflate, concern is rising about the impact on the nascent economic recovery in the US  and about weak economies in Europe, especially Germany's.

Most forecasters are still counting on modest economic growth in the US, Europe, and Japan this year. But the stock market debacle has made them uneasy. They are wondering if businesses and consumers, shaken by market losses, will restrain their purchases of goods and services. "It is not good by any means," says Farid Abolfathi, an international economist with DRI-WEFA, a consulting firm in Lexington, Mass.

The economic worries have prompted calls for interest-rate cuts in Europe. And, while America's Federal Reserve has already eased rates considerably in the past year, US policymakers are aware of the threat of a "double-dip" recession.

Still, most economists foresee modest growth in industrial nations.

Germany's tech tumble

The influence of the US economy on foreign markets is shown in Germany. Since the 30 major companies in that German index have about 50 percent of their output outside of Germany and a large chunk in the US, they cannot escape the American scene.

While Germany's main index has fallen on par with the US, one of the worst stock debacles has occurred in the German Neuer Markt, an tech-stock exchange created three years ago. The Neuer Markt price index started about 1,000, soared to around 9,000 in March 2000, as the Nasdaq peaked, and now stands about 500. That plunge makes the Nasdaq's 74 percent drop look like a picnic.

"Really amazing," says Dr. Thomas Hueck, an economist at HypoVereinsbank AG, in Munich. He sees great damage to the ability of high-tech companies to raise capital in Germany.

As in the US, economies abroad look better than the stock market. Ulrich Ramm, chief economist for Commerzbank in Frankfurt, sees "a slow and steady improvement" in the lackluster Germany economy.

In Britain, real gross domestic product should be up about 2.2 percent this year, reckons Michael Taylor, an economist with Merrill Lynch in London.

"The stock market is not reflecting any of that," he says.

The companies in Britain's FTSE 100 index get 40 percent of their earnings from abroad, another sign of the integration of the world economy.

"Nobody is getting rich off the equity market," says A. Steven Englander, an economist with Schroder Salomon Smith Barney in London. "In the last few years, European equity prices followed US prices very closely."

Impact on US dollar

The recent fall in the US dollar reflects in part the reluctance of foreign investors to expand investments in America. "It is not so much people reducing their dollar exposure as not adding to their exposure," says Mr. Englander.

To cover the more than $400 billion deficit in America's international balance of payments, foreigners must invest at least $2 billion each working day in the US. If that doesn't happen, the dollar weakens. A weak dollar means foreigners find investments in US stocks worth less in terms of their own currencies.

The Japanese stock market has been behaving relatively well. As measured by the Nikkei average, it was off only 3.35 percent for the year Monday. US investors have been pouring money into Japanese stocks, figuring that maybe an economic revival in the Japanese economy has at last arrived.

Mr. Malpass, an economist with Bear, Stearns & Co., frets that the Bank of Japan has not truly loosened monetary policy to assure a vigorous recovery after a decade of doldrums. He would like to see the central bank there buy more Japanese government bonds to boost the nation's money supply.

The one bright region in the world for stock prices is the Far East. An MSCI index of far east stock markets  including Hong Kong, Taiwan, South Korea, China, and so on  is up 5 percent this year.

"We are bullish about the prospects for Asian stock markets," says Robert Conlan, a Hong Kong-based manager of the Investec Asia Focus Fund. Asian stocks are cheap relative to US stock markets, he says. And Asian economies are mostly growing fast.